Heard in the Court of Appeals October 6, 2014
Frank P. Hiner, IV, for Plaintiff.
The Twiford Law Firm, P.C., by Edward A. O'Neal, for Defendant.
STEPHENS, Judge. Chief Judge MCGEE and Judge DIETZ concur.
Appeal by Plaintiff from order entered 27 January 2014 by Judge Robert P. Trivette in Pasquotank County District Court, No. 94-CVD-334.
Plaintiff Clarence Earl Butler appeals from the trial court's order awarding $20,492.64 and attorneys' fees to his ex-wife Defendant Vikki Elaine Butler (now Reid) based on the court's finding that Plaintiff was unjustly enriched when he received the entirety of 24 months of federal retirement pension benefits that Defendant was entitled to share in based on the qualified domestic relations order (" QDRO" ) incorporated into the parties' divorce settlement. Because we agree with Plaintiff's argument that Defendant's failure to receive her court-ordered portion of his federal retirement benefits resulted solely from her own failure to comply with federal law and the terms of the order, we hold that the trial court erred in its findings of fact and conclusion of law that Plaintiff was unjustly enriched. Accordingly, we reverse.
Facts and Procedural Background
Plaintiff and Defendant were married to each other on 21 April 1972. They separated on or about 4 March 1992, and on 12 May 1994, Plaintiff filed a complaint in Pasquotank County District Court for absolute divorce, accompanied by a Separation and Property Settlement Agreement (" Separation Agreement" ) drafted by Defendant's attorney and executed by the parties on 20 April 1994. At the time of the parties' separation, Plaintiff was employed as a Federal Civilian Employee with the Norfolk Naval Shipyard. Paragraph 15F of the Separation Agreement, entitled " Retirement Benefits," provided in relevant part that:
The marital interest in [Plaintiff's] retirement benefits with the Norfolk Naval Shipyard shall be divided proportionately between the parties based on [Plaintiff's] length of service and the coincident turn of the parties' marriage. The parties agree to enter into a [QDRO] immediately following or simultaneously with the entry of a divorce judgment, which [QDRO] shall provide for a proportionate division (as defined in the preceding sentence) of [Plaintiff's] Norfolk Naval Shipyard retirement benefits payable when [Plaintiff] begins receiving such retirement benefits. The [QDRO] shall then be submitted to both the Norfolk Naval Shipyard and to the court of competent jurisdiction for approval and entry.
On 19 September 1994, a judgment of absolute divorce was entered incorporating the Agreement and, simultaneously, upon consent of all parties, the court entered a QDRO, referred to in the Agreement as an " Order for Division of Federal Civil Service Retirement Plan," drafted by Defendant's attorney. Paragraph 1 of the QDRO provided the formula for computing Defendant's share of Plaintiff's benefits and Paragraph 4 directed the United States Office of Personnel Management (" OPM" ) to pay Defendant's share directly to her. Paragraph 7 of the QDRO provided that Defendant " shall be entitled to receive the benefits specified herein only in accordance with law and the terms of the Civil Service Retirement Spouse's Equity Act of 1984" and further stated that Defendant " shall comply with all terms and conditions of the Act . . . ." Paragraph 13 of the QDRO provided that a copy of the order " shall be served upon [OPM], Civil Service Retirement System, as the Administrator of the Retirement Plan herein, and the Administrator shall determine within a reasonable period of time whether this order can be administered by the Retirement System."
Plaintiff continued his employment in the federal civil service at the Norfolk Naval Shipyard until his retirement in October 2009. Prior to his retirement, in August 2009, Plaintiff--who had served as an active duty enlisted member of the United States Air Force from 11 July 1972 until his honorable discharge on 10 July 1978--paid $10,381.50 to the Defense Finance and Accounting Service in order to add his six years of active duty Air Force service to the computation of his overall federal civilian retirement benefits. By the time Plaintiff retired, Defendant had remarried, and Plaintiff did not inform her of his retirement. In fact, Plaintiff had been erroneously informed at a pre-retirement seminar he attended that because of her remarriage, Defendant would not be entitled to receive any share of his benefits. Beginning in November 2009 and continuing through October 2011, Plaintiff received his full retirement benefits from OPM, without any deductions for Defendant's share.
Sometime in 2011, Defendant discovered that Plaintiff had retired two years earlier. When she contacted OPM to inquire why she had not received any portion of the benefits she was entitled to share in under the QDRO, Defendant learned that the QDRO had never been filed with OPM. Defendant subsequently filed a copy of the QDRO with OPM and began receiving her share of Plaintiff's benefits in November 2011.
On 11 June 2012, Defendant sent Plaintiff a letter requesting that he reimburse her $25,616.63 in retirement back pay plus $200 in attorneys' fees. When Plaintiff refused, Defendant filed a Motion in the Cause in Pasquotank County District Court seeking (1) damages for Plaintiff's failure to advise her of his receipt of 24 months of unreduced retirement benefits and his refusal to repay her share; (2) specific performance of the Separation Agreement and a modification of the QDRO to proportionally increase her share of Plaintiff's benefits in light of his additional six years of credited employment from his military service; (3) liquidated damages; and (4) attorneys' fees.
Defendant's motion was heard on 9 October 2013. Defendant testified that, prior to this litigation, she had not had any contact with Plaintiff since their divorce. Most of Defendant's testimony focused on her allegation that Plaintiff violated the Separation Agreement by failing to inform her that he had purchased additional years of credited
employment. When Plaintiff testified, he admitted to having received 24 months of unreduced retirement benefits, but asserted that he had done nothing to breach the Separation Agreement, noting that it did not require him to do anything regarding Defendant's share of his retirement benefits, as both federal law and the terms of the QDRO explicitly conditioned Defendant's receipt of her share on her filing a copy of the QDRO with OPM. Defendant acknowledged that it was her and her attorney's responsibility to submit the QDRO to OPM and that until her discovery to the contrary in 2011, she had believed that her attorney had done so shortly after the 1994 divorce proceeding concluded. Toward the end of the hearing, the trial court asked Defendant's counsel:
THE COURT: . . . [H]ow is it that it's [Plaintiff's] problem for the two year period --how come [Plaintiff] is responsible for that back payment based upon all this other information that indicates that it's clearly your client's duty to make sure that OPM is notified[?] I mean [Defendant] may have a gripe ...